TRANSITIONING INTO REPE FROM OTHER AREAS OF RE:

The answer to "is it possible to transition to REPE from xyz " is almost always "yes", (but the level of difficulty obviously varies depending on the job)

So, if it's possible, what do you need to focus on?

Selling your skills https://twitter.com/TheRealEstateG6/status/1283440019416461314

There are 4 main job functions within REPE shops: acquisitions, development, asset management and property management

This thread will cover transitioning over into acquisitions, since that's the main end goal for most people

If you just want to work at a PE firm overall,

regardless of role, the easiest way to do it is by getting a job as a property manager (would not recommend) or asset manager (a good job, but not as prestigious or lucrative as acquisitions)

I'm going to assume you're shooting for the top, however, and only cover acquisitions

The thread will cover transitioning over to REPE from (in order from best to worst): investment sales, leasing brokerage, lending and appraisal

Will cover the main hurdles to getting an acquisitions job from each role and how to bypass them (how to effectively sell your skills)

Investment Sales:

It's incredibly easy to transfer over to real estate private equity from the investment sales side (assuming you don't work at a chop-shop) for the same reason that it's easy to transfer over to regular private equity from investment banking...

you're essentially performing the same exact job function, but from the other side of the table (as an investment sales broker, you're analyzing the deal and putting a valuation on it, you're just not completing the final step of buying it)

This makes your skillset very easy to

sell as it matches the skillset of the job you're applying for (tell them that you love RE but are tired of being the middle man - you have conviction in your analysis and want skin in the game)

For this reason, Investment sales is typically the best path for breaking into REPE

Caveat here is the more institutional the brokerage shop you're at is, the easier it is to transfer over

Eastdil is the most institutional shop and the easiest to transfer over from. Cushman & Wakefield, CBRE, JLL, Newmark Knight Frank and Colliers are usually good as well

Leasing Broker:

Leasing brokers lease up vacant space in commercial buildings on behalf of either landlords or tenants

It's a very good skillset to have but you're only focused on a small part of the deal process, which happens after the acquisition

This is your main hurdle...

So how do you sell it?

Well just because the skillset is typically used after acquisition doesn't mean it's not relevant to the acquisition role

Think about it. A huge portion of the acquisition process is underwriting leasing assumptions

Lucky for you you're an expert at that

Look up all the people who work at that shop. Tell them you can fill a gap in their team - you have a skillset that no one else there has

You know exactly what buildings tenants want, exactly how much they're willing to pay for each building (the rent), exactly how long it

will take to lease, exactly how much tenant improvement $ will be required, etc. Maybe you can even use your relationships with tenants to lease space in the REPE firm's buildings

Make them think about how much better their UW assumptions will be with someone like you there

Once you convince them that you're an overwhelming value-add, there's still one more hurdle you'll need to jump

Being a leasing broker doesn't make you an expert on underwriting, so you'll have to study very hard to crush the modeling test to put them at ease

Lender:

Transferring over to the equity side from a debt role is difficult since you haven't been trained to think about the upside, only the downside

An easier transition is typically to a debt fund (a nonbank lender that makes more aggressive loans than a bank)

However, if you want to go over to the equity side, there are a few aspects of your skillset you want to stress

The first is repetitions. Since lenders see both acquisition loans and refinancings, they get more UW reps than someone on the equity side. Play this up. Talk about

your deal experience, how you're comfortable underwriting across geographies, how many deals you've been involved in and how this experience will make you great at evaluating deals from the equity side

Second, you want to stress how you're very good at understanding risk

Lenders main focus is risk since they don't get any upside, so this is your bread and butter and it's a very important aspect of deals from the equity side as well

So what's the main hurdle still deterring REPE firms? They think you don't understand the upside. Tell them that

that isn't true.

While underwriting deals as a lender, you received the proforma for the deal that REPE firms would send you and you analyzed the feasibility of the plan as part of your assessment of risk, so you're actually very familiar with how REPE firms think and operate

Valuations/Appraisal:

In valuations you're actually performing a very similar job function to REPE firms

The issue is that no one respects your job because the valuation you reach isn't "real"

Think about it. When a REPE firm or investment sales team reaches a valuation,

the property is then bought or sold at that valuation. So that valuation is "real". When an appraiser values a property, the property doesn't transact at that value, so no one cares

So, how do you bypass this hurdle?

Simple - you stress almost exactly the same skillset investment sales brokers stress

Emphasize your deal reps and your UW prowess, which are vital for acquisitions, as well as your willingness to hustle (appraisal isn't "prestigious", so have to play up that you're hardworking)

Lastly, the easiest way to jump over from any job isn't from cold-emailing - it's from using relationships you built at your previous job

Say your an investment sales broker and your team has sold 3 buildings to a particular REPE firm

If the REPE firm liked how you performed

during the transactions (being competent, gathering diligence info, etc.), you can even bypass the entire "selling" aspect - they already know your work product and your personality and they love it so all you need to do is find a job opening

And this applies to all of the jobs

mentioned in this thread.

Do great work for every firm you interact with and you'll have a very easy time transferring over to REPE -

REPE firms might even be begging you to take a job with them if you're really good

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